I agree that in a perfect market, the LVT doesn’t change behaviour(except for the inequality issue…
Ben Jamin'
1

I agree that in a perfect market, the LVT doesn’t change behaviour(except for the inequality issue). But we don’t live in a perfect market.

Well sure there are imperfections, but in order for your argument to be correct, those imperfections have to be biased in a particular direction rather than truly random. Which by definition means there is some externality to account for. What is it?

Well, we’d still need the LVT, because the unequal ownership (not use) of productive natural resources is fundamentally unjust.

Let’s suppose we start in an initial state of perfect equality. Some people are just going to create more value than others and thus attain more wealth. Is this new unequal state of the world “unjust”? Maybe, but that’s beside the point. The goal is to maximize net human welfare, not equality. Indeed, the very incentive-based economic structure that maximizes wealth produces inequality.

A simple example. Would you rather Bob and Alice both live to 50, or Bob live to 60 and Alice live to 70? If you focus on equality, then you prefer the state of the world in which they are both drastically worse off. This is evil.

Just like slavery and theft are unjust.

A comparison to slavery and theft is absolutely not comparable in any way whatsoever. Period. Just stop. This essentially a violation of Godwin’s Law.

The reason it’s not comparable is that society can sell or rent out the land it owns in a voluntary exchange. This isn’t theft or slavery.

As no one created this Earth they do not have a property right to exclude anyone else from it’s use.

Of course they do, if society voluntarily chooses (via some democratic process) to sell or rent the property in exchange for something else they find to be of equal value. E.g. the federal government can sell land and use the money to pay for public health programs to eliminate polio. If you think it can’t possibly be acceptable to exchange land for some other thing that society has agreed provides equal or greater value, then you are advocating harmful public policy.

It doesn’t belong to anyone, either now or then. It is to be equally shared.

What if society can sell the land for something of greater value, and equally share that, providing more net value to society? If you’re against that, you’re just irrational and harmful.

And again, the rational goal isn’t to “equally share” wealth. If the government has a certain amount of money to use on public benefits, they should disproportionately favor giving it to poorer people, because it will help them more than it would help a rich person. If you refuse that idea in the name of equality, it’s just like wanting Bob and Alice to live shorter lives so they can be equal.

Stop fixating on equality. That’s the wrong goal. Period.

Buying something doesn’t confer a property right. Else stolen goods would be legal.

Stolen goods are legal in some cases. E.g. land that used to belong to Native Americans (to appeal to what seems to be a particular concern of yours). Whether that’s optimal for human welfare (i.e. “ethical”) is a complex issue centering on one key question: will this incentivize people to steal land in the future?

A ubiquitous fallacy is to focus on an ethical notion of justice without regard to consequences. For instance, suppose you steal a car from a rich guy. Should we give it back to him? In terms of immediate human welfare, no. We could do a lot more good for the world by giving it to someone poorer. But if we allowed this, it would radically alter incentives to create value, massively harming society.

Innate human ethics are highly problematic here, because they’ve been shaped by eons of natural selection, in a radically different environment from the one today. Most people innately feel like the above theft is just inherently wrong, and should be rectified for its own sake. But in utilitarian human-welfare-optimizing terms, that’s simply wrong. We don’t want “justice” or “fairness”, we want maximal utility. Failure to understand that may be the greatest economic fallacy that exists.

Moreover, you seem to be particularly stuck on a USA-specific moral quandary concerning the “original” ownership of the land by Native Americans. First of all, even if you were to go back in time to pre-Columbian days, you would encounter vast swaths of “unowned” land. The population simply wasn’t that great. And the people whose land was stolen are long gone. And even if they were alive today, giving them back their land would only be ethically optimal insofar as it changed future incentives for theft. It’s not about “righting a wrong”.

Only the creation of a good or service and its provenance confers a moral property right.

Okay, suppose I create something of great value. Like, I’m a scientist and I create a drug that heals thousands of sick children. I sell it to society in voluntary exchange for a parcel of land. Now I have a moral property right to that land.

So stop talking like this. It’s ridiculous.

In which case, we cannot own this Earth

The issue of whether to have a legal concept of land ownership is purely about what maximizes net welfare. And allowing people to voluntarily trade “their share” of land for some other thing of value is hugely and obviously aligned with that.

You’ve got good intentions, but are suffering from several common economic fallacies causing you to advocate for economic policies which are harmful to society.

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